AMT Vehicle Rental Ltd v Volkswagen Group United Kingdom Ltd
| Jurisdiction | England & Wales |
| Judge | Pearce |
| Judgment Date | 18 November 2022 |
| Neutral Citation | [2022] EWHC 2934 (Comm) |
| Docket Number | CLAIM No. CC-2021-MAN-000045 |
| Court | Queen's Bench Division (Commercial Court) |
[2022] EWHC 2934 (Comm)
His Honour Judge Pearce
CLAIM No. CC-2021-MAN-000045
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN MANCHESTER
CIRCUIT COMMERCIAL COURT (KBD)
Manchester Civil Justice Centre
1 Bridge Street West
Manchester
M60 9DJ
Mr Asa Tolson (instructed by Glaisyers Solicitors LLP) for the Claimant
Mr Lloyd Maynard (instructed by Shoosmiths LLP) for the Defendant
Hearing dates: 3 and 4 October 2022
This judgment was handed down in private at 9.30am on 18 November 2022. I direct that no official shorthand note shall be taken of this judgment and that copies of this version as handed down may be treated as authentic.
INTRODUCTION
The Claimant is a company involved in the business of supplying hire vehicles to corporate customers. The Defendant, which imports vehicles from the Volkswagen Group 1 into the United Kingdom. and sells them to independent albeit franchised motor dealers, has a demand for replacement vehicles. On 19 August 2016, the Claimant and the Defendant entered into a written contract (“the Contract”) for the supply of hire vehicles to the Defendant to replace customers' vehicles when they were unable to be used because of breakdown or other need for investigation and/or repair.
By letter dated 5 September 2019, the Defendant gave notice to terminate the contract. It is agreed that such notice was effective from 7 March 2020 (the end of the next successive period at least 3 months from the date of receipt of the notice). However, from 10 October 2019, the Defendant ceased to allow the Claimant access to its spreadsheet that was used to inform suppliers of the Defendant's demand for vehicles (“the Booking Master Sheet”) and did not otherwise inform the Claimant of its needs for replacement vehicles.
The Claimant contends that the Defendant's actions in ceasing to allow it access to the Booking Master Sheet and/or ceasing to inform the Claimant of its needs for replacement vehicles was a breach of the terms of the Contract. It claims damages by way of lost profits for the hires that it says the Defendant would have made from it but for the breach. The Defendant denies the alleged contractual terms.
The Claimant originally claimed other losses that it said were due to it under the Contract. Those claims were compromised by the parties before trial and therefore played no part in the issues before the court. However, as noted below, the positions adopted by the parties on those other issues is of relevance to one of the arguments advanced by the Defendant at trial.
THE TRIAL
The matter came for trial before me on 3 and 4 October 2022. I heard evidence from:
5.1. Mr Neil McGawley, the Claimant's Managing Director;
5.2. Mr Shaun Kelly, the Claimant's head of reservations, sales and operations; and
5.3. Mr Alex Weston, Group Mobility Manager, for the Defendant.
The Defendant had also served a witness statement dated 27 July 2022 from Ms Amanda Krebs, the Defendant's former Customer Services Centre Development Manager. Ms Krebs did not attend trial, but the Defendant sought to rely on her evidence under the Civil Evidence Act 1972. The Claimant, which itself wanted to rely on parts of Ms Krebs' statement, did not object to this
course of action but argued that limited weight should be attributed to her statement in so far as it was not supported by or consistent with other evidenceBoth Mr McGawley and Ms Krebs had provided witness statements for the purpose of an application by the Defendant for Summary Judgment. Mr McGawley verified his earlier statement in his trial witness statement. Ms Krebs did not do similarly with her previous statement and of course could not verify it at trial as she did not attend.
The factual issues relating to liability are very narrow in this case. Most matters are not in dispute and their relevance to the issue of contractual interpretation is limited to the factual matrix in which the contract was negotiated and executed. However, there are significant issues on quantum to which the evidence of Mr McGawley in particular is highly relevant.
THE RELATIONSHIP OF THE PARTIES PRIOR TO THE CONTRACT
The circumstances in which the Defendant might wish to obtain replacement hire vehicles are referred to at paragraph 10 of Ms Krebs' statement of 20 July 2022. It is common ground between the parties that the Claimant had been one of the companies supplying hire vehicles to the Defendant to meet that need prior to the parties executing the Contract. On the whole, the Claimant supplied vehicles more from the upper end of the market.
This supply took place via a company, Landar Limited, which sourced vehicle hires and managed the booking process. Landar itself had a contract with the Defendant to source vehicles from various companies of which the Claimant was one. Prior to the execution of the Contract, Landar made ad hoc requests for rentals from companies including the Claimant. If the Claimant supplied a vehicle, it would invoice Landar for the hire and Landar would in turn invoice the Defendant.
According to Mr Kelly 2, requests for vehicles were made by Landar using either email or an Excel spreadsheet. At some point this practice changed to the use of a Google form although this did not prove entirely reliable. He puts the introduction of this form, which is the document referred to as the Booking Master Sheet, as being in 2017, albeit that he says the change came about before the Claimant and the Defendant entered into the Contract (which was of course executed during the previous year). In contrast, Ms Krebs' statement at paragraphs 15 and 16 seems to indicate that the Booking Master Sheet was not introduced until 2018. It is not necessary to determine which of these is correct since nothing turns on the point – suffice it to say that, from the time of entering into the Contract, the parties had an arrangement by which the Defendant's need for vehicles was notified to the Claimant from time to time.
In 2016, both parties wanted to put their relationship on a more formal basis. This led to negotiations in which the Defendant provided a standard form of supplier contract to the Claimant. This was largely agreeable to the Claimant and the Contract was executed on 19 August 2016.
The most obvious change brought about by the parties entering into the Contract was that vehicle hires were now made pursuant to a direct contractual relationship between the Claimant and the Defendant rather than contracts between the Claimant and Landar on the one hand and Landar and the Defendant on the other. Whilst Landar continued to administer the booking process for the Defendant, once a vehicle booking was agreed, the price was set by the Contract (at a rate which reduced if the hire period was longer). Thus, there was no need to negotiate rates on a case-by-case basis.
THE CONTRACT IN GREATER DETAIL
The contract is dated 19 August 2016. It names as parties the Claimant (who is called the Provider) and the Defendant, abbreviated to VWG.
It sets out the following by way of background:
“(A) The Provider is in business on its own account as a Vehicle Hire supplier and has certain skills and abilities which may be useful to VWG.
(B) The Provider is an independent business willing to provide services to VWG as set out in this Agreement.
(C) VWG wishes to appoint the Provider to provide VWG customers replacement hire vehicles on the Terms and Conditions of this Agreement.”
Part 2 of the Contract is headed “ Engagement”. By clause 2.1, the Contract provides that:
“ With effect from the Commencement Date 3, VWG engages the Provider to provide the Services to VWG and the Provider agrees to provide the Services to VWG upon the terms and conditions set out in this Agreement.”
The “ Services” are defined at clause 1.1.44 to mean, “ the services to be delivered by or on behalf of the Provider under this Agreement as set out in Schedule 1 and the Exit Services and any services incidental thereto (such incidental Services to be agreed between the Parties), and “Service” means any of the Services (or any part of any of them).”
Schedule 1 to the Contract begins:
“Car Hire
The Provider has been appointed to supply hire vehicles to VWG as replacements for VWG customer vehicles that are off the road. The Provider's objectives are to provide a replacement VWG vehicle on a like-for-like basis or better.
1. Replacement Vehicle Process
In the event of a replacement vehicle being required VWG's CMMT 4 will request, for the customer, a like-for-like replacement vehicle or better or a suitable vehicle as specified and agreed.
2. Contact Handling
a. The Provider will, within the hours set out below, supply the Services to VWG.
…
b. VWG shall communicate reservation requests via it's (sic) CMMT via the telephone, using Mobex 5 to manage the request or in the event of a systems failure, supported by fax/e-mail confirmation.
c. The Provider will use reasonable endeavours to confirm all bookings to the CMMT within 5 minutes of the initial hire request.
d. The Provider will, subject to availability, supply replacement vehicles to the VWG customer within the agreed timescale agreed with the CMMT.”
The Schedule goes on to deal with various features of the car hire relationship, imposing various obligations on the Claimant and the Defendant as to the provision of individual hire cars and more generally regulating their relationships, including a requirement of the Claimant to provide what is described as “ management information” on the 15 th day of each month.
Schedule 2 to the Contract contains a list of Volkswagen and Audi models. Some, but by no means all, have charges listed next to them. These are the hire rates as...
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